Insurance companies operating in Algeria have just been called to order by the Insurance Supervision Commission of the Ministry of Finance.
According to our sources, the reminder that was sent to the Algerian Union of Insurance and Reinsurance Companies (UAR) relates to the “transgression” of the multilateral memorandum of understanding on motor insurance.
In turn, the Algerian Union of Insurance and Reinsurance Companies (UAR) sent a note to insurance companies to remind them of the urgent need to strictly respect this multilateral agreement.
Signed in 2017 and entered into force in January 2021, this agreement strictly regulates the discounts granted by insurance companies to customers for car insurance.
These discounts were capped at 50% in order to fight against the unfair competition which was undermining the insurance sector and the deterioration of the automobile branch of insurers, which had become unprofitable because of the rates applied, and the delays in reimbursement after the car accidents.
To enforce this memorandum of understanding, the Ministry of Finance asked the UAR to reactivate the monitoring committee in order to fully exercise its prerogatives and to examine during periodic meetings the level of application of its provisions by all signatory insurance companies.
He asked that cases of the transgression of this memorandum of understanding be brought to the attention of this commission to take the necessary disciplinary measures, according to our sources.
The Insurance Supervisory Commission insists on compliance with this memorandum of understanding to improve the results of the automobile branch and guarantee a rapid return to equilibrium.
The insurance sector represents less than 1% of the Algerian GDP
This is not the first time that insurance companies have been called to order to comply with the multilateral memorandum of understanding they signed, but these reminders have not yielded results, in the absence of sanctions against offenders.
In 2021, the Algerian insurance sector achieved a turnover of 144 billion dinars, a slight increase of 5% compared to 2020 (137 billion dinars). Its share in Algeria’s GDP is less than 1% (0.77%), according to official figures published by the UAR.
The automobile branch represented 43% of insurers’ activity in 2021, with a turnover of 62.1 billion dinars, down 2% compared to 2020 (63.2 billion dinars).
The Algerian market is dominated by public companies with a 62% share, followed by private insurers (26%), the CNMA (9%) and mixed capital companies (2%), according to the UAR.
